Weekly Update #143: SecureWorks is 2016's First Tech IPO

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Hello Investors,
 
What does a 2016 tech IPO look like? Examining: SecureWorks
 
Dell plans to spin off and take public SecureWorks this week, which will (finally) be our first technology IPO of 2016. We thought we'd look at a few of 2015's IPOs to see what the public markets now command from companies. 
 
 
At the IPO midpoint of $16.50 a share, SecureWorks will be worth ~$1.4B and have a revenue multiple of 4.1x, and touts revenue growth of 30% year-over-year. This pales in comparison in both departments relative to Box, Spotify and Pure Storage, and looks in line with Square.
 
 
SecureWorks has higher absolute revenue ($339M in 2015) than many other 2015 IPOs, and a final valuation ($1.4B) that's roughly in line with historical sizes. Below is a comprehensive overview of IPOs by year (2013-2015):
 
Conclusion? SecureWorks has a slightly lower revenue multiple (4.1x) than 2015's average (6.7x), but that is likely explained by the company's relatively low revenue growth (30%). Not a whole lot has changed, and it will be interesting to see how the company trades after being listed.
 
(Note: a big thanks to Russell Lange for his contributions to this data)
 
In other news...
Sapphire Ventures' Phil Orr takes a look at the state of the public markets and how they may impact private SaaS companies.
 
Slack’s Valuation (Shai Goldman)
Shai Goldman dives into the recent funding round of Slack to explain whether or not the company's new $3.8B valuation makes sense.
 
The IPO freeze may be over. SecureWorks set a price for its IPO today, after initially filing in December. If its IPO is a success, the transaction could embolden more companies to pull the trigger, lessening current late-stage liquidity stagnation.
 
Thanks,
Phil Haslett | Founder + Head of Investments | EquityZen 
 

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